TL;DR: Haipo Yang, co-founder and CEO of cryptocurrency exchange CoinEX, published what amounts to his memoir on the Bitcoin fork. In it, he covers a lot of insider history about his own involvement and events leading up to summer 2017’s split, creating Bitcoin Cash (BCH). Yang also muses about present-day issues of governance and the future of peer-to-peer digital cash.
A Great Irony: Haipo Yang Memoir on the Bitcoin Fork
Yang is known for not pulling public punches, and his recently posted memoir, The Story behind Bitcoin Fork, cements his reputation. Part early Bitcoin history, inside baseball, personal reflection, polemic, settling of scores, it’s a candid look from someone intimately involved in cryptocurrency’s most consequential debates.
He began his rabbit hole journey in 2011 through simple curiosity, reading and participating in online forums and trading, taking special note of scaling issues beginning to pop up around 2014. By 2016, the issue began to dominate most BTC-related discussions. “On one hand,” Yang remembered, “I didn’t think I could make a difference. On the other hand, I believed the community was looking for a better solution. Then, with the Bitcoin block size reaching 1MB in the first half of 2016, Bitcoin still did not have its capacity scaled up. It caught my attention as I found that the focus of debate in the community has changed from how to expand capacity to whether or not to expand it. That was a big issue.”
Indeed. Various compromises were proposed and implemented, but nothing seemed to stick. “I got involved in the dispute over Bitcoin capacity scaling when I started a Bitcoin mining pool in 2016: ViaBTC,” Yang detailed. “Bitcoin mining is the cornerstone of Bitcoin operation and the guardian of the Bitcoin Consensus Protocol that builds an indestructible Bitcoin network through a vast mining network. The Bitcoin whitepaper also sets out a rule that changes the consensus protocol with miners competing for the longest chain.”
I Got to Try
He described turning to the mining community, hoping they’d be more reasonable. “Things could be rather difficult by uniting the miners as there were a dozen of mining pools, big or small, scattering around the Bitcoin network. And Bitcoin miners were no longer early geeks, but a group of professional miners who, without deep understanding or belief in Bitcoin, took it as a profitable business. How hard was it to convince these people to take risks together! However, as long as there was still a glimmer of hope, I got to try,” Yang insisted.
Names like Roger Ver, Gavin Andresen, Jihan Wu, Jiang Zhuo’er, companies such as Bitmain, and memory-holed conferences in Milan all appear in the Yang reflection, making it an instant go-to reference for cryptocurrency historians seeking primary source material. However, the real value of The Story behind Bitcoin Fork is the author himself and how he pushes to give readers a perspective they won’t get from anyone else.
“To be honest, I am the beneficiary of jammed network traffic,” Yang confessed at the higher fees and longer BTC wait times, providing him and pool short-term incentive. “We know that Bitcoin mining revenue includes two parts: Block mining rewards and transaction fees. As the Bitcoin mining rewards are gradually halved and reduced, yet transaction fees are expected to increase with the popularity of Bitcoin. Before 2016, Bitcoin transaction fees accounted for a negligible proportion. At this time, it remains the unspoken default in the Bitcoin mining pool that the transaction fees were owned by the mining pool, not the miners. With the jammed network traffic in early 2016, Bitcoin transaction fees have gradually become considerable,” he noted.
An overlooked aspect of Yang’s personal participation in those debates is his innovation in sharing revenue with miners through PPS+ and transaction accelerators. “For the first time, the transaction fee was additionally distributed to miners which increased their income, and won the trust of many customers. Other mining pools have followed suit, and the model has become the de facto standard. In addition, I launched the first Bitcoin Transaction Accelerator, where users can submit Bitcoin tTXIDs and our mining pool will prioritize their transactions. It is also stipulated that the first 100 transactions can be accelerated for free every hour. This product went viral as the network traffic got increasingly jammed,” he recalled.
He goes on to discuss rampant BTC core censorship (which he characterizes as a “great irony” due to his being based in China), SegWit, supporting Bitcoin Unlimited, and the beginnings of what would become a second layer proprietary off-chain solution for BTC, Lightning Network. User Activated Soft Fork are contrasted with User Activated Hard Fork; EDA algorithm, the New York Agreement’s collapse, and the eventual climax of birthing Bitcoin Cash along with his daughter, Shuya Yang, on the same day, August 1st, 2017. “The successful fork of Bitcoin Cash caused a sensation among crypto-enthusiasts,” Yang remembered. “On the day after the hard fork alone, the number of newly registered user on ViaBTC exchange soared to over 10,000, more than tenfold that of the first two months combined.”
The drama of that early time period for sure makes it into The Story behind Bitcoin Fork, but Yang was careful to not linger there too long. “The past two years has seen the emergence of a myriad of DApps on Bitcoin Cash that contribute to a healthy ecosystem,” he stressed. “However, scaling remains the problem awaiting solution for [BTC] and its much-anticipated [lightning] network has yet to be adopted on a mass scale. By the time the market turns bullish, we are bound to see a heavily congested Bitcoin like never before, yet Bitcoin Cash, the scalable version of Bitcoin, will be able to realize its true potential.”
DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.
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